For back-to-back months, USDA held its 2022 All-Milk price forecast in a tight one-nickel range from $25.75 to $25.80 per hundredweight (cwt). That’s a far cry from the agency’s opening projection of $18.50 in May 2021 as domestic and global dairy demand has far outpaced anyone’s projections from a year ago.

As a point of comparison, the All-Milk price has closely tracked mailbox prices for a number of years. Mailbox prices reflect the actual price dairy operators receive for their milk, hence the name. They are reported at average fat tests and reflect all premiums as well as marketing costs, including hauling.

One of the main reasons these All-Milk price projection numbers have been closely watched in the recent weeks is because the Class IV market has begun to show some weakness as reported in the Hoard’s Dairyman Intel “Dairy price forecast gets dinged by the Kiwis.” To that end, USDA did ease back on its Class IV price outlook this May, dropping it to a $23.80 cwt. projection after peaking at $24.05 in April’s World Agricultural Supply and Demand Estimates.

While USDA did move Class IV downward, it held its Class III cheese prediction at $22.75 for the second straight month. That’s also the high point since USDA began making its forecast in May of last year as shown in the figure.

USDA also made its opening forecast for the upcoming year in the May World Agricultural Supply and Demand Estimates. Here are those projections:

• 2023 Class III — $20.50

• 2023 Class IV — $21.40

• 2023 All-Milk price — $23.55